The United States, the world’s strongest nation, is currently facing a huge challenge – the American baby boomers born after World War II will flood into their retirement years in the next 15 years. Unfortunately, the lifelong savings of many elderly Americans are being threatened by telephone fraud, with some fraudsters having ties to the Chinese Communist Party.
On April 9, a joint hearing was held by the US House Select Committee on the CCP and the Senate Special Committee on Aging to discuss the threat posed by the CCP to the retirement savings of American senior citizens. Participants showed particular concern over the impact of “rampant telecom fraud gangs” and “unfair financial investment systems” on the security of American pensions.
Brady Finta, the founder of the American Elder Fraud Coordination Center, stated during the hearing that San Diego County has received numerous complaints of elderly fraud, but he believes only 10% to 15% of elderly fraud victims actually report the crimes. He mentioned, “My parents were victims. My mother didn’t even want to tell me because she felt embarrassed and thought, ‘No one can do anything about it anyway.'”
New York Senator Kirsten Gillibrand pointed out that such fraudulent activities are often orchestrated by Chinese criminal syndicates based in Southeast Asia. These scams, known as “pig butchering scams,” involve deceiving elderly individuals to gain their trust and gradually drain their accounts before disappearing.
The term “pig butchering scam,” also known as a romance scam, refers to a type of telecommunications fraud that emerged in the Internet era. Scammers use technology to create false identities, gain the trust of victims, establish intimate relationships, and ultimately deceive them of their assets.
In recent years, these crimes have transitioned rapidly from fraud centers in countries such as Myanmar, the Philippines, and Indonesia to the four major scam centers in Dubai, United Arab Emirates: Phoenix, Wynn, dip, and Oasis.
According to a report released by the FBI on April 30, 2024, titled “2023 Elder Fraud Report,” various fraudulent schemes are becoming increasingly difficult to prevent. The Internet Crime Complaint Center received a total of 880,000 reports of suspected fraud. Over 100,000 cases involved individuals aged 60 and above being defrauded, a 14% increase from 2022. The total amount lost exceeded $3.4 billion, nearly an 11% increase, with almost 6,000 victims losing over $100,000 each.
In 2017, the Federal Retirement Thrift Investment Board made a decision that by mid-2020, assets in the government’s retirement funds would be automatically allocated according to the weightings of the MSCI Global Index. This decision meant billions of dollars would be automatically invested in Chinese companies as the index covers emerging markets in China.
The retirement funds include nearly $50 billion in assets for federal employees, including military personnel. In 2018, the MSCI index included over 200 Chinese A-share companies and continuously increased China’s market weight in global indices.
In 2019, some hawkish members of the Trump administration urged the Federal Retirement Thrift Investment Board to overturn the decision to invest American government retirement funds in China. They wanted to use administrative powers to protect public servants’ retirement funds from potential losses. Investing in Chinese companies deemed risky for US national security was seen as a threat to Americans.
With President Trump’s second term looming, this threat has compounded, particularly with certain overseas telecom scams controlled by the Chinese Communist Party targeting the finances of elderly Americans.
In recent years, many elderly Americans have fallen victim to “pig butchering” scams.
Prosecutor Erin West in Santa Clara County, California, has been working tirelessly to combat these scams. She stated, “I’ve been a prosecutor for over 25 years, and I’ve dealt with various types of crimes, but I’ve never seen anything like the ‘pig butchering’ scams that result in such a large number of deaths.”
CNN reported that Erin and her team were among the first to investigate these scams. She mentioned, “When scammers prey on victims, the only winners are some criminals.”
Platforms like WhatsApp, Facebook, LinkedIn, Bumble, and Tinder are increasingly populated with scammers looking for victims.
82-year-old Dennis Jones spent all his money and left his family after befriending a woman named Jessie on Facebook, whom he had never met in person.
Many such cases where victims fall prey to scams after months of manipulation have emerged and are just a fraction of millions of “pig butchering” scams globally. The Wall Street Journal described one such heartbreaking story titled “She Entranced Me: How an Online Scam Cost a Senior Citizen a Lifetime Savings.”
The FBI noted that some transnational crime organizations have set up various elaborate schemes targeting American elderly individuals. These scams, offering low risk and high returns, caused over $1.2 billion in losses for elderly Americans in 2023.
The most common type of scam is technical support fraud, where criminals impersonate technical support or customer service personnel to deceive elderly individuals. For instance, they may claim the victim’s bank account has been breached by foreign hackers and persuade them to transfer their remaining balance to an account controlled by the scammers. Nearly 18,000 elderly victims fell for such schemes.
Raja Krishnamoorthi, a member of the US House Select Committee on the CCP, highlighted direct ties between some telecom fraud gangs and the CCP. Crime boss “Broken Tooth” controls a Myanmar scam center linked to the CCP, openly declaring a shift from fighting for the mafia to fighting for the Communist Party.
Krishnamoorthi expressed concerns over Beijing’s minimal action against telecom fraud, likening it to allowing precursor chemicals for fentanyl into the U.S., posing severe threats to national security.
Official data showed that fentanyl has become a prominent cause of death for Americans aged 18 to 45, with 75,000 deaths linked to it in 2023. The DEA director in 2024, Anne Milgram, stated that the US is facing its deadliest drug crisis in history.
The number of fraudulent acts targeting Americans, especially the elderly, is staggering. The FTC estimated that Americans lost over $158 billion to scams in 2023 alone.
Chris Iacovella, CEO of the ASA, pointed out that fraud has evolved from individual criminal acts to commercially funded opportunities by some governments globally. These criminals are increasingly sophisticated, and unfortunately, the most vulnerable among us, the elderly, are often the primary targets.
These scammers’ slick tactics and evolving schemes continue to catch private companies, law enforcement, and investors off guard.
The congressional hearing on April 9 also addressed Chinese intervention in capital markets. As part of American retirement funds flow to China, it further increases financial risks for American seniors.
For over two decades, Beijing has been using Wall Street to penetrate U.S. capital markets, providing financial support for the rise of the CCP. Iacovella emphasized that Congress should entirely prohibit American pension funds from investing in China because the CCP could impede audits and information disclosures citing “national secrets” or “national security,” underscoring the need for a blanket ban on investments in China.